HenryTo
Site Admin
Joined: 06 Aug 2004
Posts: 11732
Location: Los Angeles, California
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 Posted: Sat Feb 13, 2010 9:57 am Post subject: Coinstar (CSTR) |
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CSTR, i.e. its Redbox business, took another dive yesterday:
http://blogs.barrons.com/techtraderdaily/?mod=BOL_hpp_blog_techtrader
| Quote: | Yesterday, Coinstar reported Q4 results which were in line with expectations, but the stock is selling off any way, as the debate over the impact of the workaround resufaces.
Brigantine Advisors analyst Steven Frankel today cut his rating on the stock to Hold from Buy, “awaiting signs that margins have bottomed and that the company can put its disputes with the studios behind it.”
Frankel notes that the cost of the workaround is clearly affecting margins: gross margin fell to 15.9% in the latest quarter from 17.4% in Q3 and 18.7% a year ago. He figures the workaround is adding $1-$3 a disc in additional costs. “The company needs to put these issues behind it and agree to some sort of revenue sharing/rental window,” he writes. “Without such an agreement, margins are likely to remain under pressure, as the workarounds only get more difficult as the size of the installed base of kiosks grows.” |
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